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In Depth

Following illegitimate imports of seed from the United States (US) containing the Bt10 GMO (Genetically Modified Organism) (see Brussels Brief of 8 April 2005), the European Commission is expected to suspend imports of US genetically modified feed into the European Union (EU). The expected temporary ban relates to “at risk” imports of corn gluten feed. One reason for introducing such a ban is that the producer, Swiss Syngenta, has not yet provided a detection method enabling Member States to effectively prevent further imports of Bt10. The Commission is also considering introducing a requirement that all relevant products be tested in the US before being exported to the EU. The US authorities only reported the breach of EU rules three months after the producer had notified them.

Transport: European Parliament Approves Clean Marine Fuel Directive

A new EU Directive has been approved prohibiting, from May 2006, the use of marine fuel with more than 1.5% sulphur content in ships in the Baltic Sea, North Sea and English Channel, as well as in regular passenger ships travelling between EU ports. The upper limits for fuel used in inland vessels and ships at berth in EU ports is much lower at 0.1% sulphur, this last limitation to commence at the end of 2009. All sulphur dioxide and particle emission control measures for marine fuel will be reviewed in 2008 with a view to introducing second-phase limits of 0.5% sulphur content (or less) for all shipping in EU waters. The Directive is partly designed to implement the 1997 International Maritime Organization (IMO) Convention on Air Pollution, a Convention which has still not been ratified by 17 EU Member States.

The European Parliament has approved the Directive on eco-design of energy-using products. This Directive aims at improving the environmental performance of products throughout their life cycle by systematic integration of environmental aspects at the earliest stage of their design. The Directive defines conditions and criteria for setting requirements regarding environmentally relevant product characteristics such as energy or water consumption, waste generation and extension of lifetime. However, the Directive does not introduce specific requirements for particular products. The Directive gives the Commission power to establish eco-design requirements for specific energy-using products, which have a significant impact on the environment coupled with a high volume of trade in the internal market. These eco-design requirements will become legally binding for products placed on the EU market, irrespective of where they are designed and produced.

Competition: Refusal of Access to Cartel Investigation File Unlawful

Nicola Chesaites

The European Court of First Instance (CFI) has annulled a decision of the European Commission that rejected outright the request of a consumer organisation for access to the Commission’s administrative file on proceedings against a cartel of Austrian banks, known as the ‘Lombard Club’. The CFI held that the institutions are obliged to assess in a concrete and individual manner whether any exceptions justifying refusal of access apply to each of the documents referred to in the request. A complete refusal of access by reason of the very large amount of work that such an examination would entail can only be lawful in exceptional circumstances. Furthermore, in such a case, the institution must explain specifically the reasons for which the alternatives to a concrete, individual examination of each of the documents represented an unreasonable amount of work. (Case T-2/03 Verein für Konsumenteninformation v Commission).

Mergers: Commission Proceeds to Second Phase for Sasol-Total JV

The European Commission has decided to open a second phase investigation into the planned creation of a full-function joint venture between Sasol, a German producer of petroleum-based waxes and Total, the French oil and gas company. The joint venture will be active in the production of petroleum-based waxes and bitumen additives. The Commission found that the operation could create competition concerns due to the parties’ strong position in the European market and also to the vertical links between the two companies. The Commission also found that the European market for paraffin waxes is capacity constrained and that such constraints might increase as a result of the operation. The Commission has now approximately four months to take a final decision in this matter.

Mergers: Commission Approves Acquisition of Bakelite AG by Apollo Group Subject to Conditions

The Commission has cleared the proposed acquisition of the German chemical company, Bakelite AG, by the investment group Apollo subject to conditions. The Apollo Group controls two companies that manufacture respectively, formaldehyde resins and epoxy resin products for sale throughout the world. Bakelite AG, mainly active in Europe, is a producer of formaldehyde resins, moulding compounds and epoxy resins. In order to remove the competition concerns identified by the Commission in the markets of phenolic resins for refractory materials and reactive diluents for epoxy systems, the parties offered to license a technology package to their customers, who could then sublicense it to other suppliers. This remedy, which will enable customers to develop alternative sources of supply, has been accepted by the Commission.

Mergers: Acquisition of Motorpresse by Gruner+Jahr Cleared

Javier Berasategi

The European Commission has cleared the proposed acquisition of the German publisher Motorpresse by Gruner+Jahr. Gruner+Jahr is mainly active in the publishing of magazines in several countries of the European Union. Motorpresse is a publisher of special-interest magazines. The activities of Gruner+Jahr and Motorpresse are largely complementary, as they are not active in the same market segments. In Portugal both companies publish “parenting” magazines. However, the Commission approved the merger given the already existing link between the parties through a common shareholder and the specific circumstances of the rather small market for “parenting” magazines.